Chandigarh, Jan 23: India, in its majestic march towards progress, is witnessing a profound transformation.
The traditional Indian joint family is undergoing structural change. India’s economy is transitioning from an agrarian to an industrial and service-based economy. This shift has created a trend towards nuclear families and burgeoning middle class with big aspirations.
Sameer Joshi, Chief Agency Officer, Bajaj Life Insurance says that, “Increasing life expectancy and rising healthcare costs have been making post-retirement planning a necessity. For this, life insurance serves as a versatile financial tool offering a spectrum of solutions.”
Here are 5 reasons to make life insurance a part of your retirement planning strategy.
1. Securing Post-Retirement Income
A life insurance policy offering income benefits can replace one’s primary income after retirement. Many plans, such as endowment policies and ULIPs, allow maturity payouts as regular income instead of a lump sum, while annuity plans provide regular pension payouts.
2. Coverage for Medical Expenses
As people age, the risk of serious health conditions rises, often requiring costly treatments or surgeries. A life insurance plan with a critical illness rider helps cover these expenses, enabling access to quality treatment without out-of-pocket strain.
3. Paying off Any Remaining Debts
Applying for credit facilities like a home loan later in your career may extend into post-retirement life. If the loan is repaid before the term ends, maturity benefits can help foreclose debts you do not wish to service long term.
4. Protection against Rising Expenses
To build an inflation-proof retirement corpus against rising expenses, one needs to invest and grow capital, not just save. ULIPs allow investment in a range of market-linked options, with the potential for multi-fold growth when markets move favourably.
5. Ensuring Liquidity of Estate
Liquidating assets like land, house properties and other immovable assets could be time-consuming, whereas life insurance payouts are liquid and tax efficient.
For these reasons, one should consider including life insurance in their retirement planning strategy, it is a good start to planning for their financial independence for the future.